Wednesday, May 15, 2013

► SOUTH AFRICA: SAA to finally take delivery of its long deferred A320 order beginning Q3.

SAA logoSouth African Airways (SA) will at last, begin taking delivery of twenty Airbus A320s in the next quarter (i.e.. July - September), South African Minister of Public Enterprises, Malusi Gigaba, has said. The order has been repeatedly deferred owing to SAA's ongoing financial woes.

An SAA A320
An SAA A320 (Asylumkid)
As previously announced, SAA had chosen to renegotiate its deal with Airbus Industrie SAS signed 11 years ago in which SAA will lease the aircraft, as opposed to buying them, thereby allowing it to recuperate pre-delivery payments it made to purchase them.

The aircraft will form part of the South African national carrier's broader fleet replacement plan that aims to use more modern, fuel efficient jets as a means of lowering its overall fuel bill.

SAA chief financial officer Wolf Meyer said last week the airline had selected a leasor for its "sale and leaseback" acquisition strategy for the aircraft but would not name them until the transaction had been approved by the board.

Meanwhile, Mr Gigaba says that SAA has already begun to implement its latest turnaround strategy and had achieved its cost compression target of USD140million (ZAR1.3billion) for the year ending March 2013. Gigaba added that SAA's international network has been reviewed with a long-term fleet plan also finalised; this particular topic had caused much controversy to the carrier's previous board.
"In the year ahead the focus would be on ensuring SAA’s cash position was stabilised, the cost compression programme was accelerated, the international network was reviewed and the long-term fleet plan is finalised, Mr Gigaba said during his budget speech.

Mr Gigaba also announced that SA Express had cut R129m in costs in the last financial year.

SAA’s 20-year turnaround plan has three clear stages. The first involves immediate actions the airline and the state must take in the next 12 months to resolve the airline’s precarious financial position, arrest falling market share and stop further decline."
Source [BusinessDay]

The plan will show how much money is needed to ensure SAA, SA Express (XZ) and Mango are financially stable and able to operate sustainably once they are consolidated into one holding company.